March 18, 2015 / 2:30 PM / 5 years ago

Greece backs Deutsche Telekom's network, broadband investments

ATHENS, March 18 (Reuters) - Greece’s new left-wing government said on Wednesday it was backing investments by Deutsche Telekom’s Greek arm OTE to build new networks and broaden access to broadband services in the country.

OTE, Greece’s biggest telecoms operator, is 40 percent-owned and managed by Deutsche Telekom. The Greek state holds a 10 percent stake in the group.

There has been uncertainty about the position of the new government towards foreign investment in Greece.

The government, led by Alexis Tsipras, which took power in January, has already opposed a Canadian gold mine, one of the biggest foreign investments in the country.

It has also cancelled plans to sell off the state power and natural gas utilities, a commitment made during the election campaign that chilled the investment climate and unnerved financial markets.

But the government is positive towards Deutsche Telekom’s investment in Greece and on Wednesday senior Greek government officials met Claudia Nemat, Deutsche Telekom’s board member in charge of Europe, and OTE’s Chief Executive Michael Tsamaz.

“Investments in new technologies and innovation are very high in the government agenda, as they are a driving force for the overall development of society,” Deputy Prime Minister Yannis Dragasakis said after the meeting, according to a finance ministry statement.

The government also committed to speeding up all necessary reforms to help the country achieve European Union objectives to improve growth by tapping into information technology potential by 2020, the statement said.

“Both shareholders agreed that OTE is a key constituent in attaining these targets,” it said.

Nemat said she was pleased there was an agreement with the Greek government on the importance of telecoms for Europe’s economic growth and confirmed Deutsche Telekom’s confidence in OTE and Greece.

“For us, OTE is an investment of strategic significance, and one of our largest investments abroad,” Nemat was quoted as saying in the finance ministry statement. She said OTE’s minimum 1.2 billion euro ($1.27 billion) investment in Greece by 2017 was a vote of confidence in the country’s prospects.

Greek media reported last year that Deutsche Telekom was close to a deal to increase its stake in OTE by buying a further 10 percent from cash-strapped Greece but the German company has dismissed the reports as speculation.

Selling the stake has never been part of the country’s privatisation plan under its EU/IMF international bailout as Greece wanted to have some say in the running of the former state monopoly. ($1 = 0.9427 euros) (Reporting by Angeliki Koutantou. Editing by Jane Merriman)

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